Question : Shareholders' Funds Rs. 14,00,000; Total Debts (Liabilities) Rs. 18,00,000; Current Liabilities Rs. 2,00,000. Total Assets to Debt Ratio will be
Option 1: 3:2
Option 2: 2:1
Option 3: 2.5:1
Option 4: None of the above.
Answer (1)
13th Jan, 2024
Correct Answer: 2:1
Solution :
Answer =
2:1
Total assets to debt ratio=$\frac{\text {Total Assets}}{\text {Debt}}$=$\frac{32,00,000}{16,00,000}$=2:1
Total Assets = Share Holder fund + Total debt=14,00,000+18,00,000=32,00,000.
Debt=Total debt-current liabilities=18,00,000-2,00,000=16,00,000.
Hence, the correct option is 2.
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